Markets between the US and Iran, rates and AI: geopolitical risk returns to the forefront alongside European corporate earnings.

Between Saturday, August 8th, and Tuesday, August 11th, financial markets rediscovered an old driver of volatility: geopolitics. The confrontation between the United States and Iran over the Strait of Hormuz reopened the risk premium on energy, while the attacks in the Bab el-Mandeb reminded investors how vulnerable key shipping lanes remain. Meanwhile, gold and Treasuries reacted to the renewed tensions, stocks lost momentum, and Europe continued to find support in corporate earnings. In the background, Nvidia returned to the forefront of the race to invest in artificial intelligence.

Hormuz once again sets the price of risk

The most significant development of the period came from the Middle East. Iran hardened its stance on the Strait of Hormuz, linking the normalization of maritime traffic to concessions from the United States. Further complicating the situation were new American demands for compensation related to the victims and damages of the conflict, dampening expectations of a swift diplomatic solution.

The most immediate reaction was seen in oil. On Monday, crude oil jumped nearly 5% , with Brent returning to $88 a barrel and WTI above $82 . Hormuz remains one of the world's major energy bottlenecks, and any risk of disruption is quickly transferred to prices through a greater geopolitical premium.

The situation was further complicated by a new Houthi attack in the Bab el-Mandeb area, which killed six people . The market thus found itself simultaneously pricing in tensions on two critical arteries for global energy trade.

Gold and Treasuries: Protection yes, but not without inflation

Gold was a major beneficiary of the uncertainty, rising towards $4,395 an ounce , up nearly 1% on Monday and nearing nine-week highs.

Bond dynamics were more complex. Treasuries were impacted by the risk that higher oil prices could further fuel inflation. US yields rose by about 4-5 basis points along the curve, signaling that the search for safety did not automatically translate into government bond purchases.

This is precisely what has held back stocks: more expensive energy means higher costs for businesses and consumers, while higher bond yields compress the present value of future earnings, especially in growth sectors.

Wall Street loses momentum, Europe holds firm

Following recent highs, Wall Street has shown increased sensitivity to interest rates and news from the Middle East. On Monday, the Dow Jones Industrial Average fell by about 0.11% , the S&P 500 by 0.06% , and the Nasdaq by 0.32% . These movements were modest, but consistent with a market less willing to ignore external risks.

In Europe, the picture appeared more stable. The STOXX 600 closed Tuesday at around 660.51 points , virtually unchanged, supported mainly by energy stocks and a still-strong earnings season. Estimates for the second quarter call for European corporate earnings growth of close to 22% , a figure that continues to offer valuation support despite the return of geopolitical tensions.

The contrast is significant: in the United States, the market appears more exposed to valuations and interest rates, while in Europe, earnings growth is offsetting some of the macro risk.

Nvidia and the new leap in AI scale

On the corporate front, the most significant news once again came from artificial intelligence. Nvidia has been linked to a financing plan of over $500 billion , along with major financial institutions, to support the development of the infrastructure necessary for AI growth.

The figure shows how competition is changing direction. The market no longer evaluates solely the revenue growth of chipmakers, but also the ability of the entire ecosystem to sustain massive investments in data centers, energy, networks, and computational capacity. AI remains a major driver of global stocks, but the focus is increasingly shifting from narrative to actual return on invested capital.

Copper: The vulnerability of supply

Industrial raw materials also provided an important signal. The ban on exports of copper and cobalt concentrates from the Democratic Republic of the Congo kept tensions high in a market already characterized by limited concentrate supplies.

Copper is central to power grids, electric cars, digital infrastructure, and the energy transition. A supply problem in a major producing country can therefore quickly impact global industrial costs and reignite inflationary pressures on the production side.

A still constructive, but more selective market

The message from these four days is that markets continue to move within an overall positive environment for equities , with almost all asset classes still supported by favorable underlying trends. Tensions over energy, inflation, rates, trade routes, and AI investments are overlapping, but they are not reversing the general direction of the cycle, which remains constructive for risky assets.

Higher oil prices are supporting the energy sector and have not yet compromised the resilience of global demand; gold is benefiting from uncertainty as a defensive asset, while Treasuries remain the only major asset class still structurally weak, penalized by high yields and a less favorable interest rate cycle than in the past. Conversely, global equities, particularly in the United States and Europe, continue to be supported by solid earnings and continued positive sentiment.

The market is therefore not in a "risk-off" phase, but rather in a mature and selective market , where growth is no longer uniform but driven by specific themes such as technology, energy, and earnings quality. Valuations remain supported, but are increasingly justified by earnings growth and the strength of leading sectors.

The result is a context in which the rise continues, but with greater dispersion across sectors and asset classes: it rewards those with exposure to structural trends and penalizes those tied to more defensive or less dynamic dynamics, as in the case of traditional bonds.